From warnings from various regulators to Google announced that third party cookies would be phased out over two years, the industry was under pressure. The pandemic then hit every industry hard and caused display revenues to plummet by 60% or more by some estimates.
Just as the industry was finding its feet, the IAB / PWC report with numerous follow on comments painted an industry that was overly complex and where money was erroneously being syphoned off.
The upshot of this perfect storm meant that the walled gardens of Facebook and Amazon as well as Google have grown their already enormous market share in online advertising as a result. As in-housing grows more and more advertisers are simply ignoring display to focus on other, perhaps safer, certainly less tainted media.
Yet both as an advertising industry and as a society as a whole we need a healthy display sector, independent of the giants at GAFA. It is independent display that pays for much of our journalism and our content creators. It is what makes the web and the marketing industry such exciting and dynamic places to be.
Much as I respect GAFA and other large players I would not want to work in an industry devoid of our own media companies (or have them sidelined and subjugated) . Equally I think such a scenario is bad for society as a whole – independent display therefore needs protecting and it has to start from all of us that work in the industry and care about it.
One very frustrating factor about the state of our industry is that many of the problems are immediately solvable if only we practitioners actually use the best practice techniques available. (The main reason this doesn’t happen is down to some of the perverse incentives our industry throws up, but that is for another day).
Take the key finding from the PWC study that even with large advertisers and publishers, only 54% of the advertisers money is reaching the end publisher. That could be “solved” today in a few different ways.
1. An old school direct buy where the advertiser simply sends the publisher their creative with adserver tracking and the publisher places it in their adserver. This limits targeting options and requires manual billing (both issues that can be resolved) but means that circa 95% of the advertisers money will go to the publisher (resource costs aside). This isn’t scalable for audience-led tactics and requires extra efforts in billing but can be effective for a few large strategic publishers. It is always worth remembering if the plumbing of programmatic is causing more problems that it solves.
2. More scalable are careful use of private marketplaces and programmatic guaranteed. With dialogue between the advertiser, publisher and intermediary technology (DSP/SSP) numbers can be optimised. 75-80% revenue to publisher is easily achievable for large buyers, with even greater figures at scale and with negotiation. It must be remembered that here 80% is a good number when you consider the advantages the ecosystem provides and is significantly higher than in any previous network model. As an example Jon Walsh at EMX, a SSP, is offering fixed (low) SSP margin on large publishers with no reselling. I believe the heavy use of PMPs with dialog between publishers should form the bulk of RTB media buys.
3. Tighter supply path optimisation of the long tail, discrepancy management and vendor scrutiny. Here you are ideally looking to buy inventory direct from one exchange rather than via a series of resellers. We would recommend this process be started manually and only when this becomes too resource intensive look to bring in technology to assist. The SPO blockchain technologies such as Fenestra, Ternio and Lucidity can be effective however caution is needed in adding new vendors and costs to the process without first having a clear inventory strategy.
Advertisers need to take a cohort view of publishers. An advertiser should look at all the advertisers they buy (easily pulled from a DSP) and want to buy and put them into cohorts or segments. A simple example would be:
2. Quality Performance Cohort. A list of maybe 100 to 1,000 domains that combine respectable quality with volume and performance. It is here that advertisers will get reach at less of a premium than the above cohort. Contextual tools, brand safety, fraud and quality tools can help manage the quality of this cohort. Efforts should be made to buy this group through a direct SSP not a reseller (EMX’s offering is a good example).
3. Long tail Cohort. This is basically the best of the rest strictly controlled by blacklists and fraud/brand safety and other technology. Manhy brands may decide this cohort is not worth the risk however it can provide reach and performance. Many retargeting businesses have made their bread and butter out of this cohort for years.
The above is just an example segmentation and strategy. Dividing up UGC, News, Blogs, categories and other divisors either individually or in combination can be very effective. The point here is to look at your inventory and understand the job it does supporting your audience strategy rather than leaving it all to the audience.
This can be done manually without much work but if it becomes too cumbersome that is where technology like Fenestra/Ternio/Lucidity can come in. Follow these approaches and advertisers and marketing practitioners will find a much cleaner display channel that PWC or any other auditor will be able to report on more favourably next time.
This shows how a key issue can be solved. Others can too however if we are truly to fix display for the next era rather than putting a sticking plaster on it we need to look at the fundamentals.